United States of America

USD is weakening against EUR and GBP but strengthening against JPY.

According to statistics from Automatic Data Processing (ADP), employment in March increased by 184.0 thousand, exceeding the forecast of 148.0 thousand and the February figure of 155.0 thousand, at the same time, the February non-manufacturing purchasing managers index (PMI) from the Institute for Supply Management (ISM) fell from 52.6 points to 51.4 points instead of rising to 52.8 points. Thus, the American labor market showed strength, and the service sector showed a slowdown in growth. US Federal Reserve Chairman Jerome Powell acknowledged that recent readings on both job gains and inflation have come in higher than expected, but reaffirmed officials' determination to ease monetary policy this year. The regulator's governor, Adriana Kugler, noted that she expects “disinflationary trends” to continue, which will “set the stage” for lowering interest rates. The President of the Federal Reserve Bank (FRB) of Atlanta, Raphael Bostic was less optimistic than others: he said that borrowing costs should not be reduced until Q4 2024, but one reduction in interest rates “seems appropriate”. Today, weekly data on the labor market were published, which turned out to be ambiguous: the number of initial jobless claims increased by 221.0 thousand, with preliminary estimates of 213.0 thousand and the previous value of 212.0 thousand, while the total number of citizens receiving assistance from the state decreased from 1.810 million to 1.791 million.

Eurozone

EUR continues to strengthen against its main competitors – USD, JPY, and GBP.

Today, March data on business activity and February statistics on wholesale inflation were published. The eurozone Services PMI rose from 50.2 points to 51.5 points, exceeding investor expectations by 51.1 points, and the Composite PMI rose from 49.2 points to 50.3 points instead of 49.9 points, returning to growth zone. The German Services PMI increased from 48.3 points to 50.1 points, and the Composite PMI grew from 46.3 points to 47.7 points. Business activity in the Eurozone has resumed growth as companies look to the European Central Bank (ECB) to cut interest rates soon. The February producer price index adjusted from -0.9% to -1.0% MoM and from -8.0% to -8.3% YoY. However, wholesale inflation continues to decline, contributing to a decrease in retail prices. Also today, the minutes of the ECB meeting were published, which strengthened the market's confidence in the beginning of monetary policy adjustment in June. Officials said price increases are slowing in line with expectations and companies are increasingly passing on the costs of higher wages to consumers, which has "strengthened the case for considering rate cuts".

United Kingdom

GBP is strengthening against JPY and USD but weakening against EUR.

Today, March data on business activity was published: the Services PMI decreased from 53.8 points to 53.1 points with preliminary estimates of 53.4 points, and the Composite PMI – from 53.0 points to 52.8 points with a forecast of 52.9 points. Company representatives noted an increase in domestic demand from households, despite the continued pressure of high inflation and higher rates. Growth in business activity slowed but remained strong enough to give experts confidence that the UK economy will emerge from recession in Q1 2024.

Japan

JPY continues to weaken against its main competitors – EUR, GBP, and USD.

Today, the Bank of Japan published a quarterly report in which it lowered its assessment of the economic condition of 7 of 9 Japanese regions. The document stated that this was caused by lower consumption and lower production, especially in the automobile sector. Problems with exports to China were also noted due to weak supplies of electronic equipment. At the same time, the report says that wage growth in the country remains at a serious level, including in small companies. This leads to an acceleration of inflation, which, in turn, may allow regulator representatives to further tighten monetary policy.

Australia

AUD is strengthening against its main competitors – EUR, JPY, GBP, and USD.

Today, March data on business activity was published: the Services PMI rose from 53.1 points to 54.4 points, being above expectations of 53.5 points, and the Composite PMI – from 52.1 points to 53.3 points at preliminary estimates of 53.4 points. Rising business activity could push Reserve Bank of Australia (RBA) officials to keep interest rates high. February construction market data was ambiguous, with total building permits down 1.9% but home permits up 10.7%.

Oil

Oil prices today are making moderate attempts to decline: quotes are being pressured by data on petroleum product inventories in the US published yesterday and the lack of active actions in the Middle East.

According to a report from the US Department of Energy's Energy Information Administration (EIA), oil reserves increased by 3.210 million barrels against forecasts of a decline of 0.300 million, but gasoline reserves fell by 4.256 million barrels and distillates by 1.268 million barrels. It is also worth noting that Iran has not yet launched the previously announced “retaliation strikes” against Israel’s infrastructure, so the risks of supply disruptions from the region are weakening